Attached files
| file | filename |
|---|---|
| EX-99.3 - EX-99.3 - PACWEST BANCORP | a17-23975_1ex99d3.htm |
| EX-99.2 - EX-99.2 - PACWEST BANCORP | a17-23975_1ex99d2.htm |
| 8-K - 8-K - PACWEST BANCORP | a17-23975_18k.htm |
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Filed by PacWest Bancorp pursuant to Rule 425 |
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under the Securities Act of 1933 and deemed |
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filed pursuant to Rule 14a-12 under the Securities Act of 1934 |
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Subject Company: CU Bancorp |
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Commission File No.: 001-35683 |
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PRESS RELEASE |
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PacWest Bancorp |
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(Nasdaq: PACW) |
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Contact: |
Donald D. Destino |
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Executive Vice President |
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Corporate Development and Investor Relations |
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Phone: |
310-887-8521 |
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FOR IMMEDIATE RELEASE |
October 17, 2017 |
PACWEST BANCORP ANNOUNCES RESULTS
FOR THE THIRD QUARTER 2017
Highlights
· Net Earnings of $101.5 Million, or $0.84 Per Diluted Share
· New Loan and Lease Production of $1.0 Billion
· Core Deposits Increase of $314 Million and Represent 81% of Total Deposits
· Tax Equivalent Net Interest Margin of 5.08%
· All Approvals Received for CUB Acquisition; Expected to Close October 20
Los Angeles, California . . . PacWest Bancorp (Nasdaq: PACW) today announced net earnings for the third quarter of 2017 of $101.5 million, or $0.84 per diluted share, compared to net earnings for the second quarter of 2017 of $93.6 million, or $0.77 per diluted share. The increase in net earnings from the prior quarter was primarily due to lower income tax expense partially offset by lower noninterest income and a higher provision for credit losses. Income tax expense for the third quarter was lower due to a $13.6 million reversal of a valuation allowance related to tax credits which, based on our latest analysis, are more likely than not to be utilized before they expire.
Matt Wagner, President and CEO, commented, “We delivered solid performance in the third quarter and continue to demonstrate our earning power. Our strong third quarter results produced a return on assets of 1.82% and a return on tangible equity of 16.85%.”
Mr. Wagner continued, “All required approvals have been received and we look forward to closing the CU Bancorp acquisition this week. We are excited about the exceptional core deposit franchise and opportunities for increased operating efficiencies provided by this transaction.”
FINANCIAL HIGHLIGHTS
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At or For the Three Months Ended |
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At or For the Nine Months Ended |
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September 30, |
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June 30, |
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September 30, |
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Financial Highlights |
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2017 |
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2017 |
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Change |
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2017 |
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2016 |
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Change |
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(Dollars in thousands, except per share data) |
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Net earnings |
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$ |
101,466 |
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$ |
93,647 |
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$ |
7,819 |
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$ |
273,781 |
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$ |
266,519 |
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$ |
7,262 |
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Diluted earnings per share |
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$ |
0.84 |
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$ |
0.77 |
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$ |
0.07 |
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$ |
2.26 |
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$ |
2.19 |
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$ |
0.07 |
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Return on average assets |
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1.82 |
% |
1.71 |
% |
0.11 |
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1.67 |
% |
1.69 |
% |
(0.02 |
) | ||||||
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Return on average tangible equity (1) |
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16.85 |
% |
16.06 |
% |
0.79 |
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15.63 |
% |
15.74 |
% |
(0.11 |
) | ||||||
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Net interest margin (tax equivalent) |
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5.08 |
% |
5.21 |
% |
(0.13 |
) |
5.15 |
% |
5.37 |
% |
(0.22 |
) | ||||||
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Efficiency ratio |
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40.4 |
% |
40.3 |
% |
0.1 |
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40.7 |
% |
39.7 |
% |
1.0 |
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Total assets |
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$ |
22,242,932 |
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$ |
22,246,877 |
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$ |
(3,945 |
) |
$ |
22,242,932 |
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$ |
21,315,291 |
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$ |
927,641 |
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Loans and leases held for investment, net of deferred fees |
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$ |
15,690,517 |
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$ |
15,543,457 |
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$ |
147,060 |
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$ |
15,690,517 |
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$ |
14,742,846 |
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$ |
947,671 |
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Noninterest-bearing deposits |
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$ |
6,911,874 |
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$ |
6,701,039 |
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$ |
210,835 |
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$ |
6,911,874 |
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$ |
6,521,946 |
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$ |
389,928 |
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Core deposits |
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$ |
13,531,300 |
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$ |
13,217,574 |
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$ |
313,726 |
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$ |
13,531,300 |
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$ |
12,010,639 |
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$ |
1,520,661 |
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Total deposits |
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$ |
16,773,245 |
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$ |
16,874,977 |
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$ |
(101,732 |
) |
$ |
16,773,245 |
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$ |
15,645,668 |
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$ |
1,127,577 |
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Noninterest-bearing deposits as percentage of total deposits |
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41 |
% |
40 |
% |
1 |
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41 |
% |
42 |
% |
(1 |
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Core deposits as percentage of total deposits |
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81 |
% |
78 |
% |
3 |
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81 |
% |
77 |
% |
4 |
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Equity to assets ratio |
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20.73 |
% |
20.50 |
% |
0.23 |
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20.73 |
% |
21.31 |
% |
(0.58 |
) | ||||||
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Tangible common equity ratio (1) |
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12.02 |
% |
11.75 |
% |
0.27 |
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12.02 |
% |
12.19 |
% |
(0.17 |
) | ||||||
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Book value per share |
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$ |
37.96 |
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$ |
37.55 |
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$ |
0.41 |
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$ |
37.96 |
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$ |
37.29 |
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$ |
0.67 |
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Tangible book value per share (1) |
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$ |
19.84 |
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$ |
19.40 |
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$ |
0.44 |
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$ |
19.84 |
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$ |
19.12 |
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$ |
0.72 |
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(1) Non-GAAP measure.
INCOME STATEMENT HIGHLIGHTS
Net Interest Income
Net interest income decreased by $0.8 million to $241.7 million for the third quarter of 2017 compared to $242.5 million for the second quarter of 2017 due mainly to interest expense growth exceeding interest income growth for the quarter. The loan and lease yield was 6.01% for the third quarter of 2017 compared to 6.07% for the second quarter of 2017. The decrease in the loan and lease yield was principally due to the decrease in discount accretion on acquired loans and lower loan fee income. Total discount accretion on acquired loans was $5.5 million in the third quarter of 2017 compared to $7.5 million in the second quarter of 2017.
The tax equivalent NIM was 5.08% for the third quarter of 2017 compared to 5.21% for the second quarter of 2017. The decrease in the NIM was mostly due to the decrease in discount accretion on acquired loans and loan fee income and a higher cost of average interest-bearing liabilities. Total discount accretion on acquired loans contributed 11 basis points to the NIM for the third quarter of 2017 and 16 basis points for the second quarter of 2017.
The cost of average total deposits increased to 0.31% for the third quarter of 2017 from 0.25% for the second quarter of 2017 due to higher rates paid for non-core deposits and select large-balance deposit customers.
Noninterest Income
Noninterest income decreased by $3.9 million to $31.4 million for the third quarter of 2017 compared to $35.3 million for the second quarter of 2017 due mainly to a $3.3 million decrease in leased equipment income due to lower gains on early lease terminations and a $1.9 million decrease in other income as the second quarter included a BOLI death benefit and higher recoveries from third parties, offset by an increase in gain on sale of loans and leases of $2.2 million.
The following table presents details of noninterest income for the periods indicated:
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Three Months Ended |
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September 30, |
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June 30, |
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Increase |
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Noninterest Income |
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2017 |
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2017 |
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(Decrease) |
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(In thousands) |
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Service charges on deposit accounts |
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$ |
3,465 |
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$ |
3,510 |
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$ |
(45 |
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Other commissions and fees |
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9,944 |
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10,583 |
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(639 |
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Leased equipment income |
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8,332 |
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11,635 |
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(3,303 |
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Gain on sale of loans and leases |
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2,848 |
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649 |
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2,199 |
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Gain on sale of securities |
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1,236 |
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1,651 |
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(415 |
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Other income: |
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Dividends and realized gains on equity investments |
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1,845 |
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1,587 |
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258 |
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Warrant income |
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731 |
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815 |
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(84 |
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Other |
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2,981 |
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4,852 |
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(1,871 |
) | |||
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Total noninterest income |
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$ |
31,382 |
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$ |
35,282 |
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$ |
(3,900 |
) |
Noninterest Expense
Noninterest expense increased by $0.8 million to $118.5 million for the third quarter of 2017 compared to $117.7 million for the second quarter of 2017 due mostly to a $2.3 million increase in foreclosed assets expense offset by decreases in several expense categories. The increase in foreclosed assets expense was due to a write-down of $2.1 million on foreclosed property.
The following table presents details of noninterest expense for the periods indicated:
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Three Months Ended |
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September 30, |
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June 30, |
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Increase |
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Noninterest Expense |
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2017 |
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2017 |
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(Decrease) |
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(In thousands) |
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Compensation |
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$ |
64,413 |
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$ |
65,288 |
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$ |
(875 |
) |
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Occupancy |
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12,729 |
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11,811 |
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918 |
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Data processing |
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6,459 |
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6,337 |
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122 |
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Other professional services |
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4,213 |
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3,976 |
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237 |
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Insurance and assessments |
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4,702 |
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4,856 |
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(154 |
) | |||
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Intangible asset amortization |
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3,049 |
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3,065 |
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(16 |
) | |||
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Leased equipment depreciation |
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4,862 |
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5,232 |
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(370 |
) | |||
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Foreclosed assets expense (income), net |
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2,191 |
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(157 |
) |
2,348 |
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Acquisition, integration and reorganization costs |
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1,450 |
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1,700 |
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(250 |
) | |||
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Loan expense |
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3,421 |
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3,884 |
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(463 |
) | |||
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Other |
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11,053 |
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11,715 |
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(662 |
) | |||
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Total noninterest expense |
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$ |
118,542 |
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$ |
117,707 |
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$ |
835 |
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Income Taxes
The overall effective income tax rate was 27.2% for the third quarter of 2017 and 37.0% for the second quarter of 2017. The effective rate for the third quarter was lower due to the $13.6 million reversal of a valuation allowance related to tax credits which, based on our latest analysis, are more likely than not to be utilized before they expire. The estimated effective tax rate for the full year 2017 is approximately 35%.
BALANCE SHEET HIGHLIGHTS
Loans and Leases
Total loans and leases held for investment, net of deferred fees, increased by $147.1 million in the third quarter to $15.7 billion at September 30, 2017. The net increase was driven mainly by third quarter new production of $1.0 billion and disbursements of $722.8 million, offset partially by payoffs of $903.4 million and paydowns of $637.7 million.
The following table presents a roll forward of loans and leases held for investment, net of deferred fees, for the periods indicated:
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Three Months Ended |
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Loans and Leases |
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September 30, |
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June 30, |
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Held for Investment Roll Forward (1) |
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2017 |
|
2017 |
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(Dollars in thousands) |
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Balance, beginning of period |
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$ |
15,543,457 |
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$ |
15,556,689 |
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New production |
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1,002,887 |
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1,077,929 |
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Existing loans and leases: |
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|
|
|
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Payoffs |
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(903,395 |
) |
(956,322 |
) | ||
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Paydowns |
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(637,674 |
) |
(587,000 |
) | ||
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Disbursements |
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722,777 |
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700,207 |
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Sales (2) |
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(31,528 |
) |
(45,976 |
) | ||
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Transfers to foreclosed assets |
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— |
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(502 |
) | ||
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Charge-offs |
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(6,007 |
) |
(26,410 |
) | ||
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Transfers to loans held for sale |
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— |
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(175,158 |
) | ||
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Balance, end of period |
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$ |
15,690,517 |
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$ |
15,543,457 |
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|
|
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Weighted average rate on new production |
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5.04 |
% |
4.93 |
% | ||
(1) Includes direct financing leases but excludes equipment leased to others under operating leases.
(2) Sales for the three months ended September 30, 2017 exclude sales of loans that were classified as loans held for sale at June 30, 2017.
The following table presents the composition of loans and leases held for investment, net of deferred fees, as of the dates indicated:
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|
September 30, |
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June 30, |
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March 31, |
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September 30, |
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Loan and Lease Portfolio |
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2017 |
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2017 |
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2017 |
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2016 |
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(In thousands) |
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Real estate mortgage: |
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Commercial |
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$ |
4,338,933 |
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$ |
4,418,463 |
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$ |
4,420,923 |
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$ |
4,327,565 |
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Residential |
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1,850,324 |
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1,719,269 |
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1,554,946 |
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1,242,254 |
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Total real estate mortgage |
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6,189,257 |
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6,137,732 |
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5,975,869 |
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5,569,819 |
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Real estate construction and land: |
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Commercial |
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680,950 |
|
691,828 |
|
668,510 |
|
510,831 |
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Residential |
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568,273 |
|
473,282 |
|
442,051 |
|
323,104 |
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Total real estate construction and land |
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1,249,223 |
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1,165,110 |
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1,110,561 |
|
833,935 |
| ||||
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Total real estate |
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7,438,480 |
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7,302,842 |
|
7,086,430 |
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6,403,754 |
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Commercial: |
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|
|
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Cash flow |
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2,734,454 |
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2,834,966 |
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3,138,196 |
|
3,071,606 |
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Asset-based |
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2,577,470 |
|
2,392,203 |
|
2,391,161 |
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2,573,437 |
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Venture capital |
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1,959,489 |
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2,001,427 |
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1,934,949 |
|
1,766,509 |
| ||||
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Equipment finance |
|
594,473 |
|
613,550 |
|
623,237 |
|
670,783 |
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Total commercial |
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7,865,886 |
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7,842,146 |
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8,087,543 |
|
8,082,335 |
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Consumer |
|
386,151 |
|
398,469 |
|
382,716 |
|
256,757 |
| ||||
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Total loans and leases held for investment, net of deferred fees (1) |
|
$ |
15,690,517 |
|
$ |
15,543,457 |
|
$ |
15,556,689 |
|
$ |
14,742,846 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
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Total unfunded loan commitments |
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$ |
5,037,084 |
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$ |
4,926,743 |
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$ |
4,497,373 |
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$ |
4,156,147 |
|
(1) Excludes loans held for sale carried at lower of cost or fair value at June 30, 2017.
Deposits and Client Investment Funds
The following table presents the composition of our deposit portfolio as of the dates indicated:
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|
September 30, |
|
June 30, |
|
March 31, |
|
September 30, |
| ||||
|
Deposit Category |
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2017 |
|
2017 |
|
2017 |
|
2016 |
| ||||
|
|
|
(Dollars in thousands) |
| ||||||||||
|
Noninterest-bearing demand deposits |
|
$ |
6,911,874 |
|
$ |
6,701,039 |
|
$ |
6,789,808 |
|
$ |
6,521,946 |
|
|
Interest checking deposits |
|
1,957,485 |
|
1,762,016 |
|
1,509,902 |
|
1,184,350 |
| ||||
|
Money market deposits |
|
3,967,224 |
|
4,033,471 |
|
3,758,962 |
|
3,532,050 |
| ||||
|
Savings deposits |
|
694,717 |
|
721,048 |
|
710,401 |
|
772,293 |
| ||||
|
Total core deposits |
|
13,531,300 |
|
13,217,574 |
|
12,769,073 |
|
12,010,639 |
| ||||
|
Non-core non-maturity deposits |
|
1,118,694 |
|
1,329,324 |
|
1,154,070 |
|
1,082,114 |
| ||||
|
Total non-maturity deposits |
|
14,649,994 |
|
14,546,898 |
|
13,923,143 |
|
13,092,753 |
| ||||
|
Time deposits $250,000 and under |
|
1,770,439 |
|
1,940,872 |
|
1,998,597 |
|
2,091,747 |
| ||||
|
Time deposits over $250,000 |
|
352,812 |
|
387,207 |
|
409,268 |
|
461,168 |
| ||||
|
Total time deposits |
|
2,123,251 |
|
2,328,079 |
|
2,407,865 |
|
2,552,915 |
| ||||
|
Total deposits |
|
$ |
16,773,245 |
|
$ |
16,874,977 |
|
$ |
16,331,008 |
|
$ |
15,645,668 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Noninterest-bearing demand deposits as percentage of total deposits |
|
41 |
% |
40 |
% |
42 |
% |
42 |
% | ||||
|
Core deposits as percentage of total deposits |
|
81 |
% |
78 |
% |
78 |
% |
77 |
% | ||||
At September 30, 2017, core deposits totaled $13.5 billion, or 81% of total deposits, including $6.9 billion of noninterest-bearing demand deposits, or 41% of total deposits.
In addition to deposit products, we also offer alternative non-depository cash investment options for select clients; these alternatives include investments managed by Square 1 Asset Management, Inc. (“S1AM”), our registered investment advisor subsidiary, and third-party sweep products. Total off-balance sheet client investment funds at September 30, 2017 were $1.9 billion, of which $1.6 billion was managed by S1AM.
PROVISION AND ALLOWANCE FOR CREDIT LOSSES
A provision for credit losses of $15.1 million was recorded in the third quarter of 2017 compared to $11.5 million in the second quarter of 2017. The third quarter provision consisted of $15.5 million for non-purchased credit impaired (“Non-PCI”) loans and leases and a $0.4 million negative provision for PCI loans; this compares to a provision of $12.5 million and a negative provision of $1.0 million, respectively, for the second quarter of 2017. The higher provision for the third quarter of 2017 was due mainly to loan risk rating downgrades combined with net portfolio growth. The allowance for Non-PCI credit losses to Non-PCI loans and leases held for investment coverage ratio was 1.11% and 1.02% at September 30, 2017 and June 30, 2017.
The following tables show roll forwards of the allowance for credit losses for the periods indicated:
|
|
|
Three Months Ended September 30, 2017 |
| |||||||||||||
|
|
|
Non-PCI |
|
|
|
|
|
|
|
|
| |||||
|
Allowance for Credit |
|
Loans and |
|
Unfunded |
|
Total |
|
PCI |
|
|
| |||||
|
Losses Rollforward |
|
Leases |
|
Commitments |
|
Non-PCI |
|
Loans |
|
Total |
| |||||
|
|
|
|
|
|
|
(In thousands) |
|
|
|
|
| |||||
|
Beginning balance |
|
$ |
138,879 |
|
$ |
20,263 |
|
$ |
159,142 |
|
$ |
7,079 |
|
$ |
166,221 |
|
|
Charge-offs |
|
(5,928 |
) |
— |
|
(5,928 |
) |
(79 |
) |
(6,007 |
) | |||||
|
Recoveries |
|
4,865 |
|
— |
|
4,865 |
|
217 |
|
5,082 |
| |||||
|
Net charge-offs |
|
(1,063 |
) |
— |
|
(1,063 |
) |
138 |
|
(925 |
) | |||||
|
Provision |
|
14,954 |
|
546 |
|
15,500 |
|
(381 |
) |
15,119 |
| |||||
|
Ending balance |
|
$ |
152,770 |
|
$ |
20,809 |
|
$ |
173,579 |
|
$ |
6,836 |
|
$ |
180,415 |
|
|
|
|
Three Months Ended June 30, 2017 |
| |||||||||||||
|
|
|
Non-PCI |
|
|
|
|
|
|
|
|
| |||||
|
Allowance for Credit |
|
Loans and |
|
Unfunded |
|
Total |
|
PCI |
|
|
| |||||
|
Losses Rollforward |
|
Leases |
|
Commitments |
|
Non-PCI |
|
Loans |
|
Total |
| |||||
|
|
|
|
|
|
|
(In thousands) |
|
|
|
|
| |||||
|
Beginning balance |
|
$ |
149,826 |
|
$ |
17,763 |
|
$ |
167,589 |
|
$ |
11,481 |
|
$ |
179,070 |
|
|
Charge-offs |
|
(22,951 |
) |
— |
|
(22,951 |
) |
(3,459 |
) |
(26,410 |
) | |||||
|
Recoveries |
|
2,004 |
|
— |
|
2,004 |
|
58 |
|
2,062 |
| |||||
|
Net charge-offs |
|
(20,947 |
) |
— |
|
(20,947 |
) |
(3,401 |
) |
(24,348 |
) | |||||
|
Provision |
|
10,000 |
|
2,500 |
|
12,500 |
|
(1,001 |
) |
11,499 |
| |||||
|
Ending balance |
|
$ |
138,879 |
|
$ |
20,263 |
|
$ |
159,142 |
|
$ |
7,079 |
|
$ |
166,221 |
|
The gross charge-offs for the third quarter of 2017 included $3.4 million for venture capital loans. Recoveries for the quarter included $2.6 million related to venture capital loans previously charged off in 2017. The annualized ratio of total net charge-offs to total average loans was 0.02% for the quarter ended September 30, 2017 and 0.40% for the nine months ended September 30, 2017.
CREDIT QUALITY
The following table presents Non-PCI loan and lease credit quality metrics as of the dates indicated:
|
|
|
September 30, |
|
June 30, |
|
Increase |
| |||
|
Non-PCI Credit Quality Metrics |
|
2017 |
|
2017 |
|
(Decrease) |
| |||
|
|
|
(Dollars in thousands) |
| |||||||
|
Nonaccrual loans and leases held for investment (1) |
|
$ |
157,697 |
|
$ |
172,576 |
|
$ |
(14,879 |
) |
|
Classified loans and leases held for investment (1) |
|
344,777 |
|
339,977 |
|
4,800 |
| |||
|
Performing troubled debt restructured loans held for investment |
|
56,552 |
|
55,910 |
|
642 |
| |||
|
Allowance for credit losses |
|
173,579 |
|
159,142 |
|
14,437 |
| |||
|
Net charge-offs (for the quarter) |
|
1,063 |
|
20,947 |
|
(19,884 |
) | |||
|
Provision for credit losses (for the quarter) |
|
15,500 |
|
12,500 |
|
3,000 |
| |||
|
Allowance for credit losses to loans and leases held for investment |
|
1.11 |
% |
1.02 |
% |
|
| |||
|
Allowance for credit losses to nonaccrual loans and leases held for investment |
|
110.1 |
% |
92.2 |
% |
|
| |||
|
Nonaccrual loans and leases held for investment to loans and leases held for investment |
|
1.00 |
% |
1.11 |
% |
|
| |||
|
Nonperforming assets to loans and leases held for investment and foreclosed assets |
|
1.08 |
% |
1.20 |
% |
|
| |||
|
Classified loans and leases held for investment to loans and leases held for investment |
|
2.20 |
% |
2.19 |
% |
|
| |||
(1) Excludes loans held for sale carried at lower of cost or fair value at June 30, 2017.
The following table presents Non-PCI nonaccrual loans and leases and accruing loans and leases past due between 30 and 89 days by portfolio segment and class as of the dates indicated:
|
|
|
Non-PCI Nonaccrual Loans and Leases |
|
Non-PCI Accruing and |
| ||||||||||||
|
|
|
September 30, 2017 |
|
June 30, 2017 |
|
30-89 Days Past Due |
| ||||||||||
|
|
|
|
|
% of |
|
|
|
% of |
|
September 30, |
|
June 30, |
| ||||
|
|
|
|
|
Loan |
|
|
|
Loan |
|
2017 |
|
2017 |
| ||||
|
|
|
Amount |
|
Category |
|
Amount |
|
Category |
|
Amount |
|
Amount |
| ||||
|
|
|
(Dollars in thousands) |
| ||||||||||||||
|
Real estate mortgage: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Commercial |
|
$ |
63,096 |
|
1.5 |
% |
$ |
65,599 |
|
1.5 |
% |
$ |
1,446 |
|
$ |
3,734 |
|
|
Residential |
|
3,186 |
|
0.2 |
% |
5,229 |
|
0.3 |
% |
282 |
|
46 |
| ||||
|
Total real estate mortgage |
|
66,282 |
|
1.1 |
% |
70,828 |
|
1.2 |
% |
1,728 |
|
3,780 |
| ||||
|
Real estate construction and land: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Commercial |
|
— |
|
0.0 |
% |
— |
|
0.0 |
% |
— |
|
— |
| ||||
|
Residential |
|
— |
|
0.0 |
% |
— |
|
0.0 |
% |
— |
|
— |
| ||||
|
Total real estate construction and land |
|
— |
|
0.0 |
% |
— |
|
0.0 |
% |
— |
|
— |
| ||||
|
Commercial: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Cash flow |
|
33,514 |
|
1.2 |
% |
43,169 |
|
1.5 |
% |
72 |
|
201 |
| ||||
|
Asset-based |
|
3,977 |
|
0.2 |
% |
1,718 |
|
0.1 |
% |
— |
|
— |
| ||||
|
Venture capital |
|
22,686 |
|
1.2 |
% |
25,278 |
|
1.3 |
% |
2,720 |
|
23,171 |
| ||||
|
Equipment finance |
|
30,942 |
|
5.2 |
% |
31,111 |
|
5.1 |
% |
— |
|
— |
| ||||
|
Total commercial |
|
91,119 |
|
1.2 |
% |
101,276 |
|
1.3 |
% |
2,792 |
|
23,372 |
| ||||
|
Consumer |
|
296 |
|
0.1 |
% |
472 |
|
0.1 |
% |
286 |
|
— |
| ||||
|
Total held for investment (1) |
|
$ |
157,697 |
|
1.0 |
% |
$ |
172,576 |
|
1.1 |
% |
$ |
4,806 |
|
$ |
27,152 |
|
(1) Excludes loans held for sale carried at lower of cost or fair value at June 30, 2017.
The following table presents nonperforming assets as of the dates indicated:
|
|
|
September 30, |
|
June 30, |
|
Increase |
| |||
|
Nonperforming Assets |
|
2017 |
|
2017 |
|
(Decrease) |
| |||
|
|
|
(Dollars in thousands) |
| |||||||
|
|
|
|
|
|
|
|
| |||
|
Nonaccrual Non-PCI loans and leases held for investment (1) |
|
$ |
157,697 |
|
$ |
172,576 |
|
$ |
(14,879 |
) |
|
Nonaccrual PCI loans held for investment |
|
1,761 |
|
1,980 |
|
(219 |
) | |||
|
Total nonaccrual loans and leases |
|
159,458 |
|
174,556 |
|
(15,098 |
) | |||
|
Foreclosed assets, net |
|
11,630 |
|
13,278 |
|
(1,648 |
) | |||
|
Total nonperforming assets |
|
$ |
171,088 |
|
$ |
187,834 |
|
$ |
(16,746 |
) |
|
|
|
|
|
|
|
|
| |||
|
Nonaccrual loans and leases held for investment to loans and leases held for investment |
|
1.01 |
% |
1.12 |
% |
|
| |||
|
Nonperforming assets to loans and leases held for investment and foreclosed assets |
|
1.09 |
% |
1.20 |
% |
|
| |||
(1) Excludes loans held for sale carried at lower of cost or fair value at June 30, 2017.
CU BANCORP MERGER ANNOUNCEMENT
On April 6, 2017, PacWest announced the signing of a definitive agreement and plan of merger (the “Agreement”) whereby PacWest will acquire CU Bancorp (“CUB”) in a transaction valued at approximately $705 million as of the announcement date.
CUB, headquartered in Los Angeles, California, is the parent of California United Bank (“CU Bank”), a California state-chartered non-member bank, with approximately $3.0 billion in assets and nine branches located in Los Angeles, Orange, Ventura, and San Bernardino counties at June 30, 2017. In connection with the acquisition, CU Bank will be merged into Pacific Western Bank, the principal operating subsidiary of PacWest.
The acquisition, which has been approved by the PacWest and CUB boards of directors and bank regulatory authorities, is expected to close on October 20, 2017.
ABOUT PACWEST BANCORP
PacWest Bancorp (“PacWest”) is a bank holding company with over $22 billion in assets with one wholly-owned banking subsidiary, Pacific Western Bank (the “Bank”). The Bank has 74 full-service branches located throughout the state of California and one branch in Durham, North Carolina. We provide commercial banking services, including real estate, construction, and commercial loans, and comprehensive deposit and treasury management services to small and medium-sized businesses. We offer additional products and services through our CapitalSource and Square 1 Bank divisions. Our CapitalSource Division provides cash flow, asset-based, equipment and real estate loans and treasury management services to established middle market businesses on a national basis. Our Square 1 Bank Division offers a comprehensive suite of financial services focused on entrepreneurial businesses and their venture capital and private equity investors, with offices located in key innovation hubs across the United States. For more information about PacWest Bancorp, visit www.pacwestbancorp.com, or to learn more about Pacific Western Bank, visit www.pacificwesternbank.com.
FORWARD LOOKING STATEMENTS
This release contains certain “forward-looking statements” about the Company and its subsidiaries within the meaning of the Private Securities Litigation Reform Act of 1995, including forward-looking statements relating to the Company’s current business plans and expectations regarding future operating results and metrics and including statements about our expectations regarding our pending merger between the Company and CUB. All statements contained in this release that are not clearly historical in nature are forward-looking, and the words “anticipate,” “assume,” “intend,” “believe,” “forecast,” “expect,” “estimate,” “plan,” “continue,” “will,” “should,” “look forward” and similar expressions are generally intended to identify forward-looking statements. All forward-looking statements (including statements regarding future financial and operating results and future transactions and their results) involve risks, uncertainties and contingencies, many of which are beyond our control, which may cause actual results, performance, or achievements to differ materially from anticipated results, performance or achievements. These risks and uncertainties include, but are not limited to, our ability to compete effectively against other financial institutions in our banking markets; the impact of changes in interest rates or levels of market activity, especially on our loan and investment portfolios; deterioration, weaker than expected improvement, or other changes in the state of the economy or the markets in which we conduct business (including the levels of IPOs and M&A activities); changes in credit quality and the effect of credit quality on our provision for loan and lease losses and allowance for loan and leases losses; our ability to attract deposits and other sources of funding or liquidity; our capital requirements and our ability to generate capital internally or raise capital on favorable terms; the costs and effects of legal, compliance and regulatory actions, changes and developments, including the impact of adverse judgments or settlements in litigation, the initiation and resolution of regulatory or other governmental inquiries or investigations, and/or the results of regulatory examinations or reviews; the Company’s ability to complete the pending CUB acquisition, or any future acquisition, successfully integrate such acquired entities, or achieve expected beneficial synergies and/or operating efficiencies, in each case within expected timeframes or at all; and our success at managing the risks involved in the foregoing items and all other factors set forth in the Company’s public reports, including the Annual Report on Form 10-K for the year ended December 31, 2016, and particularly the discussion of risk factors within that document.
All forward-looking statements included in this release are based on information available at the time of the release. We are under no obligation to (and expressly disclaim any such obligation to) update or alter our forward-looking statements, whether as a result of new information, future events or otherwise except as required by law.
PACWEST BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
|
|
|
September 30, |
|
June 30, |
|
December 31, |
| |||
|
|
|
2017 |
|
2017 |
|
2016 |
| |||
|
|
|
(Dollars in thousands, except per share data) |
| |||||||
|
ASSETS: |
|
|
|
|
|
|
| |||
|
Cash and due from banks |
|
$ |
147,579 |
|
$ |
180,330 |
|
$ |
337,965 |
|
|
Interest-earning deposits in financial institutions |
|
122,439 |
|
107,150 |
|
81,705 |
| |||
|
Total cash and cash equivalents |
|
270,018 |
|
287,480 |
|
419,670 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Securities available-for-sale, at estimated fair value |
|
3,532,230 |
|
3,474,560 |
|
3,223,830 |
| |||
|
Federal Home Loan Bank stock, at cost |
|
17,250 |
|
22,059 |
|
21,870 |
| |||
|
Total investment securities |
|
3,549,480 |
|
3,496,619 |
|
3,245,700 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Loans held for sale |
|
— |
|
175,158 |
|
— |
| |||
|
|
|
|
|
|
|
|
| |||
|
Non-PCI loans and leases |
|
15,693,776 |
|
15,536,735 |
|
15,412,092 |
| |||
|
PCI loans |
|
62,509 |
|
72,445 |
|
108,445 |
| |||
|
Total gross loans and leases held for investment |
|
15,756,285 |
|
15,609,180 |
|
15,520,537 |
| |||
|
Deferred fees, net |
|
(65,768 |
) |
(65,723 |
) |
(64,583 |
) | |||
|
Total loans and leases held for investment, net of deferred fees |
|
15,690,517 |
|
15,543,457 |
|
15,455,954 |
| |||
|
Allowance for loan and lease losses |
|
(159,606 |
) |
(145,958 |
) |
(157,238 |
) | |||
|
Total loans and leases held for investment, net |
|
15,530,911 |
|
15,397,499 |
|
15,298,716 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Equipment leased to others under operating leases |
|
233,866 |
|
203,212 |
|
229,905 |
| |||
|
Premises and equipment, net |
|
28,910 |
|
29,108 |
|
38,594 |
| |||
|
Foreclosed assets, net |
|
11,630 |
|
13,278 |
|
12,976 |
| |||
|
Deferred tax asset, net |
|
65,321 |
|
70,354 |
|
94,112 |
| |||
|
Goodwill |
|
2,173,949 |
|
2,173,949 |
|
2,173,949 |
| |||
|
Core deposit and customer relationship intangibles, net |
|
27,188 |
|
30,237 |
|
36,366 |
| |||
|
Other assets |
|
351,659 |
|
369,983 |
|
319,779 |
| |||
|
Total assets |
|
$ |
22,242,932 |
|
$ |
22,246,877 |
|
$ |
21,869,767 |
|
|
|
|
|
|
|
|
|
| |||
|
LIABILITIES: |
|
|
|
|
|
|
| |||
|
Noninterest-bearing deposits |
|
$ |
6,911,874 |
|
$ |
6,701,039 |
|
$ |
6,659,016 |
|
|
Interest-bearing deposits |
|
9,861,371 |
|
10,173,938 |
|
9,211,595 |
| |||
|
Total deposits |
|
16,773,245 |
|
16,874,977 |
|
15,870,611 |
| |||
|
Borrowings |
|
250,399 |
|
217,454 |
|
905,812 |
| |||
|
Subordinated debentures |
|
448,126 |
|
445,743 |
|
440,744 |
| |||
|
Accrued interest payable and other liabilities |
|
160,494 |
|
148,798 |
|
173,545 |
| |||
|
Total liabilities |
|
17,632,264 |
|
17,686,972 |
|
17,390,712 |
| |||
|
STOCKHOLDERS’ EQUITY (1) |
|
4,610,668 |
|
4,559,905 |
|
4,479,055 |
| |||
|
Total liabilities and stockholders’ equity |
|
$ |
22,242,932 |
|
$ |
22,246,877 |
|
$ |
21,869,767 |
|
|
|
|
|
|
|
|
|
| |||
|
Book value per share |
|
$ |
37.96 |
|
$ |
37.55 |
|
$ |
36.93 |
|
|
Tangible book value per share (2) |
|
$ |
19.84 |
|
$ |
19.40 |
|
$ |
18.71 |
|
|
Shares outstanding |
|
121,449,794 |
|
121,448,321 |
|
121,283,669 |
| |||
|
(1) Includes net unrealized gain on securities available-for-sale, net |
|
$ |
33,613 |
|
$ |
29,729 |
|
$ |
5,982 |
|
|
(2) Non-GAAP measure. |
|
|
|
|
|
|
| |||
PACWEST BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
|
|
|
Three Months Ended |
|
Nine Months Ended September 30, |
| |||||||||||
|
|
|
September 30, |
|
June 30, |
|
September 30, |
|
|
|
|
| |||||
|
|
|
2017 |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
| |||||
|
|
|
(Dollars in thousands, except per share data) |
| |||||||||||||
|
Interest income: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Loans and leases |
|
$ |
235,666 |
|
$ |
234,618 |
|
$ |
225,370 |
|
$ |
694,462 |
|
$ |
686,071 |
|
|
Investment securities |
|
24,762 |
|
24,689 |
|
22,187 |
|
72,490 |
|
67,154 |
| |||||
|
Deposits in financial institutions |
|
538 |
|
237 |
|
298 |
|
967 |
|
914 |
| |||||
|
Total interest income |
|
260,966 |
|
259,544 |
|
247,855 |
|
767,919 |
|
754,139 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Interest expense: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Deposits |
|
13,071 |
|
10,205 |
|
7,247 |
|
31,653 |
|
24,143 |
| |||||
|
Borrowings |
|
188 |
|
1,066 |
|
695 |
|
2,272 |
|
1,628 |
| |||||
|
Subordinated debentures |
|
6,017 |
|
5,800 |
|
5,278 |
|
17,379 |
|
15,382 |
| |||||
|
Total interest expense |
|
19,276 |
|
17,071 |
|
13,220 |
|
51,304 |
|
41,153 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Net interest income |
|
241,690 |
|
242,473 |
|
234,635 |
|
716,615 |
|
712,986 |
| |||||
|
Provision for credit losses |
|
15,119 |
|
11,499 |
|
8,471 |
|
51,346 |
|
42,514 |
| |||||
|
Net interest income after provision for credit losses |
|
226,571 |
|
230,974 |
|
226,164 |
|
665,269 |
|
670,472 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Service charges on deposit accounts |
|
3,465 |
|
3,510 |
|
3,488 |
|
10,733 |
|
10,977 |
| |||||
|
Other commissions and fees |
|
9,944 |
|
10,583 |
|
12,528 |
|
30,917 |
|
35,090 |
| |||||
|
Leased equipment income |
|
8,332 |
|
11,635 |
|
8,538 |
|
29,442 |
|
25,305 |
| |||||
|
Gain on sale of loans and leases |
|
2,848 |
|
649 |
|
157 |
|
4,209 |
|
790 |
| |||||
|
Gain on sale of securities |
|
1,236 |
|
1,651 |
|
382 |
|
2,788 |
|
8,970 |
| |||||
|
FDIC loss sharing expense, net |
|
— |
|
— |
|
— |
|
— |
|
(8,917 |
) | |||||
|
Other income |
|
5,557 |
|
7,254 |
|
1,827 |
|
23,689 |
|
11,365 |
| |||||
|
Total noninterest income |
|
31,382 |
|
35,282 |
|
26,920 |
|
101,778 |
|
83,580 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Compensation |
|
64,413 |
|
65,288 |
|
62,661 |
|
194,581 |
|
185,900 |
| |||||
|
Occupancy |
|
12,729 |
|
11,811 |
|
12,010 |
|
36,148 |
|
36,835 |
| |||||
|
Data processing |
|
6,459 |
|
6,337 |
|
6,234 |
|
19,811 |
|
17,782 |
| |||||
|
Other professional services |
|
4,213 |
|
3,976 |
|
4,625 |
|
11,567 |
|
11,598 |
| |||||
|
Insurance and assessments |
|
4,702 |
|
4,856 |
|
4,324 |
|
14,349 |
|
14,240 |
| |||||
|
Intangible asset amortization |
|
3,049 |
|
3,065 |
|
4,224 |
|
9,178 |
|
13,341 |
| |||||
|
Leased equipment depreciation |
|
4,862 |
|
5,232 |
|
5,298 |
|
15,719 |
|
15,608 |
| |||||
|
Foreclosed assets expense (income), net |
|
2,191 |
|
(157 |
) |
(248 |
) |
2,177 |
|
(812 |
) | |||||
|
Acquisition, integration and |
|
1,450 |
|
1,700 |
|
— |
|
3,650 |
|
200 |
| |||||
|
Loan expense |
|
3,421 |
|
3,884 |
|
1,931 |
|
10,692 |
|
6,231 |
| |||||
|
Other expense |
|
11,053 |
|
11,715 |
|
9,651 |
|
34,921 |
|
30,556 |
| |||||
|
Total noninterest expense |
|
118,542 |
|
117,707 |
|
110,710 |
|
352,793 |
|
331,479 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Earnings before income taxes |
|
139,411 |
|
148,549 |
|
142,374 |
|
414,254 |
|
422,573 |
| |||||
|
Income tax expense |
|
(37,945 |
) |
(54,902 |
) |
(48,479 |
) |
(140,473 |
) |
(156,054 |
) | |||||
|
Net earnings |
|
$ |
101,466 |
|
$ |
93,647 |
|
$ |
93,895 |
|
$ |
273,781 |
|
$ |
266,519 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Basic and diluted earnings per share |
|
$ |
0.84 |
|
$ |
0.77 |
|
$ |
0.77 |
|
$ |
2.26 |
|
$ |
2.19 |
|
PACWEST BANCORP AND SUBSIDIARIES
NET EARNINGS PER SHARE CALCULATIONS
|
|
|
Three Months Ended |
|
Nine Months Ended |
| |||||||||||
|
|
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
| |||||||
|
|
|
2017 |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
| |||||
|
|
|
(In thousands, except per share data) |
| |||||||||||||
|
Basic Earnings Per Share: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Net earnings |
|
$ |
101,466 |
|
$ |
93,647 |
|
$ |
93,895 |
|
$ |
273,781 |
|
$ |
266,519 |
|
|
Less: earnings allocated to unvested restricted stock (1) |
|
(1,149 |
) |
(1,080 |
) |
(1,048 |
) |
(3,239 |
) |
(2,983 |
) | |||||
|
Net earnings allocated to common shares |
|
$ |
100,317 |
|
$ |
92,567 |
|
$ |
92,847 |
|
$ |
270,542 |
|
$ |
263,536 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Weighted-average basic shares and unvested restricted stock outstanding |
|
121,447 |
|
121,422 |
|
121,818 |
|
121,405 |
|
121,739 |
| |||||
|
Less: weighted-average unvested restricted stock outstanding |
|
(1,394 |
) |
(1,455 |
) |
(1,401 |
) |
(1,450 |
) |
(1,425 |
) | |||||
|
Weighted-average basic shares outstanding |
|
120,053 |
|
119,967 |
|
120,417 |
|
119,955 |
|
120,314 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Basic earnings per share |
|
$ |
0.84 |
|
$ |
0.77 |
|
$ |
0.77 |
|
$ |
2.26 |
|
$ |
2.19 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Diluted Earnings Per Share: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Net earnings allocated to common shares |
|
$ |
100,317 |
|
$ |
92,567 |
|
$ |
92,847 |
|
$ |
270,542 |
|
$ |
263,536 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Weighted-average basic shares outstanding |
|
120,053 |
|
119,967 |
|
120,417 |
|
119,955 |
|
120,314 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Diluted earnings per share |
|
$ |
0.84 |
|
$ |
0.77 |
|
$ |
0.77 |
|
$ |
2.26 |
|
$ |
2.19 |
|
(1) Represents cash dividends paid to holders of unvested stock, net of forfeitures, plus undistributed earnings amounts available to holders of unvested restricted stock, if any.
PACWEST BANCORP AND SUBSIDIARIES
AVERAGE BALANCE SHEET AND YIELD ANALYSIS
|
|
|
Three Months Ended |
| ||||||||||||||||||||||
|
|
|
September 30, 2017 |
|
June 30, 2017 |
|
September 30, 2016 |
| ||||||||||||||||||
|
|
|
|
|
Interest |
|
Average |
|
|
|
Interest |
|
Average |
|
|
|
Interest |
|
Average |
| ||||||
|
|
|
Average |
|
Income/ |
|
Yield/ |
|
Average |
|
Income/ |
|
Yield/ |
|
Average |
|
Income/ |
|
Yield/ |
| ||||||
|
|
|
Balance |
|
Expense |
|
Cost |
|
Balance |
|
Expense |
|
Cost |
|
Balance |
|
Expense |
|
Cost |
| ||||||
|
|
|
(Dollars in thousands) |
| ||||||||||||||||||||||
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
PCI loans |
|
$ |
60,126 |
|
$ |
3,308 |
|
21.83 |
% |
$ |
68,759 |
|
$ |
4,643 |
|
27.08 |
% |
$ |
117,781 |
|
$ |
5,868 |
|
19.82 |
% |
|
Non-PCI loans and leases |
|
15,514,904 |
|
232,510 |
|
5.95 |
% |
15,429,162 |
|
229,975 |
|
5.98 |
% |
14,417,170 |
|
219,502 |
|
6.06 |
% | ||||||
|
Total loans and leases (1) |
|
15,575,030 |
|
235,818 |
|
6.01 |
% |
15,497,921 |
|
234,618 |
|
6.07 |
% |
14,534,951 |
|
225,370 |
|
6.17 |
% | ||||||
|
Investment securities (2) |
|
3,510,956 |
|
29,495 |
|
3.33 |
% |
3,436,785 |
|
29,538 |
|
3.45 |
% |
3,338,209 |
|
27,025 |
|
3.22 |
% | ||||||
|
Deposits in financial institutions |
|
171,455 |
|
538 |
|
1.24 |
% |
96,087 |
|
237 |
|
0.99 |
% |
238,425 |
|
298 |
|
0.50 |
% | ||||||
|
Total interest-earning assets |
|
19,257,441 |
|
265,851 |
|
5.48 |
% |
19,030,793 |
|
264,393 |
|
5.57 |
% |
18,111,585 |
|
252,693 |
|
5.55 |
% | ||||||
|
Other assets |
|
2,880,433 |
|
|
|
|
|
2,905,809 |
|
|
|
|
|
2,960,468 |
|
|
|
|
| ||||||
|
Total assets |
|
$ |
22,137,874 |
|
|
|
|
|
$ |
21,936,602 |
|
|
|
|
|
$ |
21,072,053 |
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Liabilities and Stockholders’ Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Interest checking |
|
$ |
2,146,125 |
|
2,960 |
|
0.55 |
% |
$ |
1,709,699 |
|
1,697 |
|
0.40 |
% |
$ |
1,161,931 |
|
604 |
|
0.21 |
% | |||
|
Money market |
|
4,914,803 |
|
6,307 |
|
0.51 |
% |
4,907,865 |
|
4,993 |
|
0.41 |
% |
4,514,525 |
|
3,303 |
|
0.29 |
% | ||||||
|
Savings |
|
707,367 |
|
289 |
|
0.16 |
% |
708,389 |
|
296 |
|
0.17 |
% |
764,415 |
|
341 |
|
0.18 |
% | ||||||
|
Time |
|
2,256,259 |
|
3,515 |
|
0.62 |
% |
2,366,399 |
|
3,219 |
|
0.55 |
% |
2,666,434 |
|
2,999 |
|
0.45 |
% | ||||||
|
Total interest-bearing deposits |
|
10,024,554 |
|
13,071 |
|
0.52 |
% |
9,692,352 |
|
10,205 |
|
0.42 |
% |
9,107,305 |
|
7,247 |
|
0.32 |
% | ||||||
|
Borrowings |
|
61,071 |
|
188 |
|
1.22 |
% |
457,774 |
|
1,066 |
|
0.93 |
% |
583,982 |
|
695 |
|
0.47 |
% | ||||||
|
Subordinated debentures |
|
447,012 |
|
6,017 |
|
5.34 |
% |
443,756 |
|
5,800 |
|
5.24 |
% |
439,970 |
|
5,278 |
|
4.77 |
% | ||||||
|
Total interest-bearing liabilities |
|
10,532,637 |
|
19,276 |
|
0.73 |
% |
10,593,882 |
|
17,071 |
|
0.65 |
% |
10,131,257 |
|
13,220 |
|
0.52 |
% | ||||||
|
Noninterest-bearing demand deposits |
|
6,858,816 |
|
|
|
|
|
6,646,349 |
|
|
|
|
|
6,274,294 |
|
|
|
|
| ||||||
|
Other liabilities |
|
153,932 |
|
|
|
|
|
151,095 |
|
|
|
|
|
135,801 |
|
|
|
|
| ||||||
|
Total liabilities |
|
17,545,385 |
|
|
|
|
|
17,391,326 |
|
|
|
|
|
16,541,352 |
|
|
|
|
| ||||||
|
Stockholders’ equity |
|
4,592,489 |
|
|
|
|
|
4,545,276 |
|
|
|
|
|
4,530,701 |
|
|
|
|
| ||||||
|
Total liabilities and stockholders’ equity |
|
$ |
22,137,874 |
|
|
|
|
|
$ |
21,936,602 |
|
|
|
|
|
$ |
21,072,053 |
|
|
|
|
| |||
|
Net interest income (3) |
|
|
|
$ |
246,575 |
|
|
|
|
|
$ |
247,322 |
|
|
|
|
|
$ |
239,473 |
|
|
| |||
|
Net interest spread (3) |
|
|
|
|
|
4.75 |
% |
|
|
|
|
4.92 |
% |
|
|
|
|
5.03 |
% | ||||||
|
Net interest margin (3) |
|
|
|
|
|
5.08 |
% |
|
|
|
|
5.21 |
% |
|
|
|
|
5.26 |
% | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Total deposits (4) |
|
$ |
16,883,370 |
|
$ |
13,071 |
|
0.31 |
% |
$ |
16,338,701 |
|
$ |
10,205 |
|
0.25 |
% |
$ |
15,381,599 |
|
$ |
7,247 |
|
0.19 |
% |
|
Funding sources (5) |
|
$ |
17,391,453 |
|
$ |
19,276 |
|
0.44 |
% |
$ |
17,240,231 |
|
$ |
17,071 |
|
0.40 |
% |
$ |
16,405,551 |
|
$ |
13,220 |
|
0.32 |
% |
(1) Starting with the third quarter of 2017, includes tax-equivalent adjustments related to tax-exempt interest on loans.
(2) Includes tax-equivalent adjustments of $4.7 million, $4.8 million, and $4.8 million for the three months ended September 30, 2017, June 30, 2017, and September 30, 2016 related to tax-exempt income on municipal securities. The federal statutory tax rate utilized was 35% for the periods.
(3) Tax equivalent.
(4) Total deposits is the sum of total interest-bearing deposits and noninterest-bearing demand deposits. The cost of total deposits is calculated as annualized interest expense on deposits divided by average total deposits.
(5) Funding sources is the sum of total interest-bearing liabilities and noninterest-bearing demand deposits. The cost of funding sources is calculated as annualized total interest expense divided by average funding sources.
PACWEST BANCORP AND SUBSIDIARIES
FIVE QUARTER BALANCE SHEET
|
|
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
| |||||
|
|
|
2017 |
|
2017 |
|
2017 |
|
2016 |
|
2016 |
| |||||
|
|
|
(Dollars in thousands, except per share data) |
| |||||||||||||
|
ASSETS: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Cash and due from banks |
|
$ |
147,579 |
|
$ |
180,330 |
|
$ |
184,608 |
|
$ |
337,965 |
|
$ |
286,371 |
|
|
Interest-earning deposits in financial institutions |
|
122,439 |
|
107,150 |
|
111,892 |
|
81,705 |
|
253,994 |
| |||||
|
Total cash and cash equivalents |
|
270,018 |
|
287,480 |
|
296,500 |
|
419,670 |
|
540,365 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Securities available-for-sale |
|
3,532,230 |
|
3,474,560 |
|
3,336,992 |
|
3,223,830 |
|
3,341,335 |
| |||||
|
Federal Home Loan Bank stock |
|
17,250 |
|
22,059 |
|
17,901 |
|
21,870 |
|
19,386 |
| |||||
|
Total investment securities |
|
3,549,480 |
|
3,496,619 |
|
3,354,893 |
|
3,245,700 |
|
3,360,721 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Loans held for sale |
|
— |
|
175,158 |
|
— |
|
— |
|
— |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Non-PCI loans and leases |
|
15,693,776 |
|
15,536,735 |
|
15,526,518 |
|
15,412,092 |
|
14,686,206 |
| |||||
|
PCI loans |
|
62,509 |
|
72,445 |
|
96,353 |
|
108,445 |
|
120,221 |
| |||||
|
Total gross loans and leases held for investment |
|
15,756,285 |
|
15,609,180 |
|
15,622,871 |
|
15,520,537 |
|
14,806,427 |
| |||||
|
Deferred fees, net |
|
(65,768 |
) |
(65,723 |
) |
(66,182 |
) |
(64,583 |
) |
(63,581 |
) | |||||
|
Total loans and leases held for investment, net of deferred fees |
|
15,690,517 |
|
15,543,457 |
|
15,556,689 |
|
15,455,954 |
|
14,742,846 |
| |||||
|
Allowance for loan and lease losses |
|
(159,606 |
) |
(145,958 |
) |
(161,307 |
) |
(157,238 |
) |
(147,976 |
) | |||||
|
Total loans and leases held for investment, net |
|
15,530,911 |
|
15,397,499 |
|
15,395,382 |
|
15,298,716 |
|
14,594,870 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Equipment leased to others under operating leases |
|
233,866 |
|
203,212 |
|
224,580 |
|
229,905 |
|
198,931 |
| |||||
|
Premises and equipment, net |
|
28,910 |
|
29,108 |
|
28,908 |
|
38,594 |
|
38,977 |
| |||||
|
Foreclosed assets, net |
|
11,630 |
|
13,278 |
|
12,842 |
|
12,976 |
|
15,113 |
| |||||
|
Deferred tax asset, net |
|
65,321 |
|
70,354 |
|
88,765 |
|
94,112 |
|
27,073 |
| |||||
|
Goodwill |
|
2,173,949 |
|
2,173,949 |
|
2,173,949 |
|
2,173,949 |
|
2,173,949 |
| |||||
|
Core deposit and customer relationship intangibles, net |
|
27,188 |
|
30,237 |
|
33,302 |
|
36,366 |
|
39,542 |
| |||||
|
Other assets |
|
351,659 |
|
369,983 |
|
318,133 |
|
319,779 |
|
325,750 |
| |||||
|
Total assets |
|
$ |
22,242,932 |
|
$ |
22,246,877 |
|
$ |
21,927,254 |
|
$ |
21,869,767 |
|
$ |
21,315,291 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
LIABILITIES: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Noninterest-bearing deposits |
|
$ |
6,911,874 |
|
$ |
6,701,039 |
|
$ |
6,789,808 |
|
$ |
6,659,016 |
|
$ |
6,521,946 |
|
|
Interest-bearing deposits |
|
9,861,371 |
|
10,173,938 |
|
9,541,200 |
|
9,211,595 |
|
9,123,722 |
| |||||
|
Total deposits |
|
16,773,245 |
|
16,874,977 |
|
16,331,008 |
|
15,870,611 |
|
15,645,668 |
| |||||
|
Borrowings |
|
250,399 |
|
217,454 |
|
460,609 |
|
905,812 |
|
541,011 |
| |||||
|
Subordinated debentures |
|
448,126 |
|
445,743 |
|
442,516 |
|
440,744 |
|
441,112 |
| |||||
|
Accrued interest payable and other liabilities |
|
160,494 |
|
148,798 |
|
185,015 |
|
173,545 |
|
144,905 |
| |||||
|
Total liabilities |
|
17,632,264 |
|
17,686,972 |
|
17,419,148 |
|
17,390,712 |
|
16,772,696 |
| |||||
|
STOCKHOLDERS’ EQUITY (1) |
|
4,610,668 |
|
4,559,905 |
|
4,508,106 |
|
4,479,055 |
|
4,542,595 |
| |||||
|
Total liabilities and stockholders’ equity |
|
$ |
22,242,932 |
|
$ |
22,246,877 |
|
$ |
21,927,254 |
|
$ |
21,869,767 |
|
$ |
21,315,291 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Book value per share |
|
$ |
37.96 |
|
$ |
37.55 |
|
$ |
37.13 |
|
$ |
36.93 |
|
$ |
37.29 |
|
|
Tangible book value per share (2) |
|
$ |
19.84 |
|
$ |
19.40 |
|
$ |
18.95 |
|
$ |
18.71 |
|
$ |
19.12 |
|
|
Shares outstanding |
|
121,449,794 |
|
121,448,321 |
|
121,408,133 |
|
121,283,669 |
|
121,817,524 |
| |||||
|
(1) Includes net unrealized gain on securities available-for-sale, net |
|
$ |
33,613 |
|
$ |
29,729 |
|
$ |
12,718 |
|
$ |
5,982 |
|
$ |
72,073 |
|
|
(2) Non-GAAP measure. |
|
|
|
|
|
|
|
|
|
|
| |||||
PACWEST BANCORP AND SUBSIDIARIES
FIVE QUARTER STATEMENT OF EARNINGS
|
|
|
Three Months Ended |
| |||||||||||||
|
|
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
| |||||
|
|
|
2017 |
|
2017 |
|
2017 |
|
2016 |
|
2016 |
| |||||
|
|
|
(Dollars in thousands, except per share data) |
| |||||||||||||
|
Interest income: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Loans and leases |
|
$ |
235,666 |
|
$ |
234,618 |
|
$ |
224,178 |
|
$ |
238,223 |
|
$ |
225,370 |
|
|
Investment securities |
|
24,762 |
|
24,689 |
|
23,039 |
|
23,403 |
|
22,187 |
| |||||
|
Deposits in financial institutions |
|
538 |
|
237 |
|
192 |
|
147 |
|
298 |
| |||||
|
Total interest income |
|
260,966 |
|
259,544 |
|
247,409 |
|
261,773 |
|
247,855 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Interest expense: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Deposits |
|
13,071 |
|
10,205 |
|
8,377 |
|
7,369 |
|
7,247 |
| |||||
|
Borrowings |
|
188 |
|
1,066 |
|
1,018 |
|
631 |
|
695 |
| |||||
|
Subordinated debentures |
|
6,017 |
|
5,800 |
|
5,562 |
|
5,468 |
|
5,278 |
| |||||
|
Total interest expense |
|
19,276 |
|
17,071 |
|
14,957 |
|
13,468 |
|
13,220 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Net interest income |
|
241,690 |
|
242,473 |
|
232,452 |
|
248,305 |
|
234,635 |
| |||||
|
Provision for credit losses |
|
15,119 |
|
11,499 |
|
24,728 |
|
23,215 |
|
8,471 |
| |||||
|
Net interest income after provision for credit losses |
|
226,571 |
|
230,974 |
|
207,724 |
|
225,090 |
|
226,164 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Service charges on deposit accounts |
|
3,465 |
|
3,510 |
|
3,758 |
|
3,557 |
|
3,488 |
| |||||
|
Other commissions and fees |
|
9,944 |
|
10,583 |
|
10,390 |
|
12,036 |
|
12,528 |
| |||||
|
Leased equipment income |
|
8,332 |
|
11,635 |
|
9,475 |
|
8,614 |
|
8,538 |
| |||||
|
Gain on sale of loans and leases |
|
2,848 |
|
649 |
|
712 |
|
119 |
|
157 |
| |||||
|
Gain (loss) on sale of securities |
|
1,236 |
|
1,651 |
|
(99 |
) |
515 |
|
382 |
| |||||
|
FDIC loss sharing expense, net |
|
— |
|
— |
|
— |
|
— |
|
— |
| |||||
|
Other income |
|
5,557 |
|
7,254 |
|
10,878 |
|
4,054 |
|
1,827 |
| |||||
|
Total noninterest income |
|
31,382 |
|
35,282 |
|
35,114 |
|
28,895 |
|
26,920 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Compensation |
|
64,413 |
|
65,288 |
|
64,880 |
|
66,013 |
|
62,661 |
| |||||
|
Occupancy |
|
12,729 |
|
11,811 |
|
11,608 |
|
12,076 |
|
12,010 |
| |||||
|
Data processing |
|
6,459 |
|
6,337 |
|
7,015 |
|
6,574 |
|
6,234 |
| |||||
|
Other professional services |
|
4,213 |
|
3,976 |
|
3,378 |
|
4,880 |
|
4,625 |
| |||||
|
Insurance and assessments |
|
4,702 |
|
4,856 |
|
4,791 |
|
4,124 |
|
4,324 |
| |||||
|
Intangible asset amortization |
|
3,049 |
|
3,065 |
|
3,064 |
|
3,176 |
|
4,224 |
| |||||
|
Leased equipment depreciation |
|
4,862 |
|
5,232 |
|
5,625 |
|
5,291 |
|
5,298 |
| |||||
|
Foreclosed assets expense (income), net |
|
2,191 |
|
(157 |
) |
143 |
|
2,693 |
|
(248 |
) | |||||
|
Acquisition, integration and reorganization costs |
|
1,450 |
|
1,700 |
|
500 |
|
— |
|
— |
| |||||
|
Loan expense |
|
3,421 |
|
3,884 |
|
3,387 |
|
3,140 |
|
1,931 |
| |||||
|
Other expense |
|
11,053 |
|
11,715 |
|
12,153 |
|
10,655 |
|
9,651 |
| |||||
|
Total noninterest expense |
|
118,542 |
|
117,707 |
|
116,544 |
|
118,622 |
|
110,710 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Earnings before income taxes |
|
139,411 |
|
148,549 |
|
126,294 |
|
135,363 |
|
142,374 |
| |||||
|
Income tax expense |
|
(37,945 |
) |
(54,902 |
) |
(47,626 |
) |
(49,716 |
) |
(48,479 |
) | |||||
|
Net earnings |
|
$ |
101,466 |
|
$ |
93,647 |
|
$ |
78,668 |
|
$ |
85,647 |
|
$ |
93,895 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Basic and diluted earnings per share |
|
$ |
0.84 |
|
$ |
0.77 |
|
$ |
0.65 |
|
$ |
0.71 |
|
$ |
0.77 |
|
PACWEST BANCORP AND SUBSIDIARIES
FIVE QUARTER SELECTED FINANCIAL DATA
|
|
|
At or For the Three Months Ended |
| |||||||||||||
|
|
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
| |||||
|
|
|
2017 |
|
2017 |
|
2017 |
|
2016 |
|
2016 |
| |||||
|
|
|
(Dollars in thousands) |
| |||||||||||||
|
Performance Ratios: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Return on average assets (1) |
|
1.82 |
% |
1.71 |
% |
1.47 |
% |
1.59 |
% |
1.77 |
% | |||||
|
Return on average equity (1) |
|
8.77 |
% |
8.26 |
% |
7.08 |
% |
7.57 |
% |
8.24 |
% | |||||
|
Return on average tangible equity (1)(2) |
|
16.85 |
% |
16.06 |
% |
13.90 |
% |
14.88 |
% |
16.15 |
% | |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Yield on average loans and leases (1) |
|
6.01 |
% |
6.07 |
% |
5.94 |
% |
6.31 |
% |
6.17 |
% | |||||
|
Yield on average interest-earning assets (1)(3) |
|
5.48 |
% |
5.57 |
% |
5.48 |
% |
5.76 |
% |
5.55 |
% | |||||
|
Cost of average total deposits (1) |
|
0.31 |
% |
0.25 |
% |
0.21 |
% |
0.19 |
% |
0.19 |
% | |||||
|
Cost of average time deposits (1) |
|
0.62 |
% |
0.55 |
% |
0.45 |
% |
0.40 |
% |
0.45 |
% | |||||
|
Cost of average interest-bearing liabilities (1) |
|
0.73 |
% |
0.65 |
% |
0.59 |
% |
0.52 |
% |
0.52 |
% | |||||
|
Cost of average funding sources (1) |
|
0.44 |
% |
0.40 |
% |
0.36 |
% |
0.32 |
% |
0.32 |
% | |||||
|
Net interest spread (1)(3) |
|
4.75 |
% |
4.92 |
% |
4.89 |
% |
5.24 |
% |
5.03 |
% | |||||
|
Net interest margin (1)(3) |
|
5.08 |
% |
5.21 |
% |
5.16 |
% |
5.47 |
% |
5.26 |
% | |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Efficiency ratio |
|
40.4 |
% |
40.3 |
% |
41.4 |
% |
40.1 |
% |
40.1 |
% | |||||
|
Noninterest expense as a percentage of average assets (1) |
|
2.15 |
% |
2.15 |
% |
2.18 |
% |
2.20 |
% |
2.09 |
% | |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Average Balances: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Loans and leases, net of deferred fees |
|
$ |
15,575,030 |
|
$ |
15,497,921 |
|
$ |
15,297,044 |
|
$ |
15,008,268 |
|
$ |
14,534,951 |
|
|
Interest-earning assets |
|
19,257,441 |
|
19,030,793 |
|
18,655,243 |
|
18,413,189 |
|
18,111,585 |
| |||||
|
Total assets |
|
22,137,874 |
|
21,936,602 |
|
21,645,534 |
|
21,427,950 |
|
21,072,053 |
| |||||
|
Noninterest-bearing deposits |
|
6,858,816 |
|
6,646,349 |
|
6,595,346 |
|
6,496,221 |
|
6,274,294 |
| |||||
|
Interest-bearing deposits |
|
10,024,554 |
|
9,692,352 |
|
9,330,235 |
|
9,327,080 |
|
9,107,305 |
| |||||
|
Total deposits |
|
16,883,370 |
|
16,338,701 |
|
15,925,581 |
|
15,823,301 |
|
15,381,599 |
| |||||
|
Borrowings and subordinated debentures |
|
508,083 |
|
901,530 |
|
1,038,424 |
|
946,474 |
|
1,023,952 |
| |||||
|
Interest-bearing liabilities |
|
10,532,637 |
|
10,593,882 |
|
10,368,659 |
|
10,273,554 |
|
10,131,257 |
| |||||
|
Funding sources |
|
17,391,453 |
|
17,240,231 |
|
16,964,005 |
|
16,769,775 |
|
16,405,551 |
| |||||
|
Stockholders’ equity |
|
4,592,489 |
|
4,545,276 |
|
4,503,675 |
|
4,501,948 |
|
4,530,701 |
| |||||
(1) Annualized.
(2) Non-GAAP measure.
(3) Tax equivalent.
PACWEST BANCORP AND SUBSIDIARIES
FIVE QUARTER SELECTED FINANCIAL DATA
|
|
|
At or For the Three Months Ended |
| |||||||||||||
|
|
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
| |||||
|
|
|
2017 |
|
2017 |
|
2017 |
|
2016 |
|
2016 |
| |||||
|
|
|
(Dollars in thousands) |
| |||||||||||||
|
Non-PCI Credit Quality: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Allowance for credit losses to loans and leases held for investment |
|
1.11 |
% |
1.02 |
% |
1.08 |
% |
1.05 |
% |
1.05 |
% | |||||
|
Allowance for credit losses to nonaccrual loans and leases held for investment |
|
110.1 |
% |
92.2 |
% |
96.9 |
% |
94.5 |
% |
90.1 |
% | |||||
|
Nonaccrual loans and leases held for investment to loans and leases held for investment |
|
1.00 |
% |
1.11 |
% |
1.11 |
% |
1.11 |
% |
1.16 |
% | |||||
|
Nonperforming assets to loans and leases held for investment and foreclosed assets |
|
1.08 |
% |
1.20 |
% |
1.20 |
% |
1.19 |
% |
1.27 |
% | |||||
|
Nonperforming assets to total assets |
|
0.76 |
% |
0.84 |
% |
0.85 |
% |
0.84 |
% |
0.87 |
% | |||||
|
Trailing twelve month net charge-offs to average loans and leases held for investment |
|
0.35 |
% |
0.37 |
% |
0.24 |
% |
0.15 |
% |
0.04 |
% | |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
PacWest Bancorp Consolidated Capital: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Tier 1 leverage ratio (1) |
|
12.02 |
% |
11.90 |
% |
11.87 |
% |
11.91 |
% |
12.13 |
% | |||||
|
Common equity tier 1 capital ratio (1) |
|
12.52 |
% |
12.28 |
% |
12.31 |
% |
12.31 |
% |
12.83 |
% | |||||
|
Tier 1 capital ratio (1) |
|
12.52 |
% |
12.28 |
% |
12.31 |
% |
12.31 |
% |
12.83 |
% | |||||
|
Total capital ratio (1) |
|
15.74 |
% |
15.42 |
% |
15.56 |
% |
15.56 |
% |
16.18 |
% | |||||
|
Risk-weighted assets (1) |
|
$ |
19,086,798 |
|
$ |
19,084,823 |
|
$ |
18,732,723 |
|
$ |
18,568,622 |
|
$ |
17,713,506 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Equity to assets ratio |
|
20.73 |
% |
20.50 |
% |
20.56 |
% |
20.48 |
% |
21.31 |
% | |||||
|
Tangible common equity ratio (2) |
|
12.02 |
% |
11.75 |
% |
11.67 |
% |
11.54 |
% |
12.19 |
% | |||||
|
Book value per share |
|
$ |
37.96 |
|
$ |
37.55 |
|
$ |
37.13 |
|
$ |
36.93 |
|
$ |
37.29 |
|
|
Tangible book value per share (2) |
|
$ |
19.84 |
|
$ |
19.40 |
|
$ |
18.95 |
|
$ |
18.71 |
|
$ |
19.12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Pacific Western Bank Capital: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Tier 1 leverage ratio (1) |
|
11.46 |
% |
11.41 |
% |
11.36 |
% |
11.40 |
% |
11.54 |
% | |||||
|
Common equity tier 1 capital ratio (1) |
|
11.95 |
% |
11.79 |
% |
11.79 |
% |
11.78 |
% |
12.21 |
% | |||||
|
Tier 1 capital ratio (1) |
|
11.95 |
% |
11.79 |
% |
11.79 |
% |
11.78 |
% |
12.21 |
% | |||||
|
Total capital ratio (1) |
|
12.89 |
% |
12.66 |
% |
12.74 |
% |
12.72 |
% |
13.15 |
% | |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Equity to assets ratio |
|
20.22 |
% |
20.07 |
% |
20.11 |
% |
20.02 |
% |
20.77 |
% | |||||
|
Tangible common equity ratio (2) |
|
11.45 |
% |
11.27 |
% |
11.16 |
% |
11.02 |
% |
11.56 |
% | |||||
(1) Capital information for September 30, 2017 is preliminary.
(2) Non-GAAP measure.
GAAP TO NON-GAAP RECONCILIATION
This press release contains certain non-GAAP financial disclosures for: (1) return on average tangible equity, (2) tangible common equity ratio, and (3) tangible book value per share. The Company uses these non-GAAP financial measures to provide meaningful supplemental information regarding the Company’s operational performance and to enhance investors’ overall understanding of such financial performance. In particular, the use of return on average tangible equity, tangible common equity ratio, and tangible book value per share is prevalent among banking regulators, investors and analysts. Accordingly, we disclose the non-GAAP measures in addition to the related GAAP measures of: (1) return on average equity, (2) equity to assets ratio, and (3) book value per share.
The reconciliations for the following GAAP financial measures to the non-GAAP financial measures are presented below: (1) return on average equity to return on average tangible equity, (2) equity to assets ratio to tangible common equity ratio, and (3) book value per share to tangible book value per share.
PACWEST BANCORP AND SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION
|
|
|
Three Months Ended |
|
Nine Months Ended |
| |||||||||||
|
|
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
| |||||||
|
Return on Average Tangible Equity |
|
2017 |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
| |||||
|
|
|
(Dollars in thousands) |
| |||||||||||||
|
Net earnings |
|
$ |
101,466 |
|
$ |
93,647 |
|
$ |
93,895 |
|
$ |
273,781 |
|
$ |
266,519 |
|
|
Average stockholders’ equity |
|
$ |
4,592,489 |
|
$ |
4,545,276 |
|
$ |
4,530,701 |
|
$ |
4,547,472 |
|
$ |
4,484,468 |
|
|
Less: Average intangible assets |
|
2,202,922 |
|
2,205,814 |
|
2,217,564 |
|
2,205,927 |
|
2,222,346 |
| |||||
|
Average tangible common equity |
|
$ |
2,389,567 |
|
$ |
2,339,462 |
|
$ |
2,313,137 |
|
$ |
2,341,545 |
|
$ |
2,262,122 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Return on average equity (1) |
|
8.77 |
% |
8.26 |
% |
8.24 |
% |
8.05 |
% |
7.94 |
% | |||||
|
Return on average tangible equity (2) |
|
16.85 |
% |
16.06 |
% |
16.15 |
% |
15.63 |
% |
15.74 |
% | |||||
(1) Annualized net earnings divided by average stockholders’ equity.
(2) Annualized net earnings divided by average tangible common equity.
PACWEST BANCORP AND SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION
|
Tangible Common Equity Ratio/ |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
| |||||
|
Tangible Book Value Per Share |
|
2017 |
|
2017 |
|
2017 |
|
2016 |
|
2016 |
| |||||
|
|
|
(Dollars in thousands, except per share data) |
| |||||||||||||
|
PacWest Bancorp Consolidated: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Stockholders’ equity |
|
$ |
4,610,668 |
|
$ |
4,559,905 |
|
$ |
4,508,106 |
|
$ |
4,479,055 |
|
$ |
4,542,595 |
|
|
Less: Intangible assets |
|
2,201,137 |
|
2,204,186 |
|
2,207,251 |
|
2,210,315 |
|
2,213,491 |
| |||||
|
Tangible common equity |
|
$ |
2,409,531 |
|
$ |
2,355,719 |
|
$ |
2,300,855 |
|
$ |
2,268,740 |
|
$ |
2,329,104 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Total assets |
|
$ |
22,242,932 |
|
$ |
22,246,877 |
|
$ |
21,927,254 |
|
$ |
21,869,767 |
|
$ |
21,315,291 |
|
|
Less: Intangible assets |
|
2,201,137 |
|
2,204,186 |
|
2,207,251 |
|
2,210,315 |
|
2,213,491 |
| |||||
|
Tangible assets |
|
$ |
20,041,795 |
|
$ |
20,042,691 |
|
$ |
19,720,003 |
|
$ |
19,659,452 |
|
$ |
19,101,800 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Equity to assets ratio |
|
20.73 |
% |
20.50 |
% |
20.56 |
% |
20.48 |
% |
21.31 |
% | |||||
|
Tangible common equity ratio (1) |
|
12.02 |
% |
11.75 |
% |
11.67 |
% |
11.54 |
% |
12.19 |
% | |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Book value per share |
|
$ |
37.96 |
|
$ |
37.55 |
|
$ |
37.13 |
|
$ |
36.93 |
|
$ |
37.29 |
|
|
Tangible book value per share (2) |
|
$ |
19.84 |
|
$ |
19.40 |
|
$ |
18.95 |
|
$ |
18.71 |
|
$ |
19.12 |
|
|
Shares outstanding |
|
121,449,794 |
|
121,448,321 |
|
121,408,133 |
|
121,283,669 |
|
121,817,524 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Pacific Western Bank: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Stockholder’s equity |
|
$ |
4,494,876 |
|
$ |
4,460,911 |
|
$ |
4,405,770 |
|
$ |
4,374,478 |
|
$ |
4,416,623 |
|
|
Less: Intangible assets |
|
2,201,137 |
|
2,204,186 |
|
2,207,251 |
|
2,210,315 |
|
2,213,491 |
| |||||
|
Tangible common equity |
|
$ |
2,293,739 |
|
$ |
2,256,725 |
|
$ |
2,198,519 |
|
$ |
2,164,163 |
|
$ |
2,203,132 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Total assets |
|
$ |
22,225,420 |
|
$ |
22,223,320 |
|
$ |
21,910,720 |
|
$ |
21,848,644 |
|
$ |
21,266,705 |
|
|
Less: Intangible assets |
|
2,201,137 |
|
2,204,186 |
|
2,207,251 |
|
2,210,315 |
|
2,213,491 |
| |||||
|
Tangible assets |
|
$ |
20,024,283 |
|
$ |
20,019,134 |
|
$ |
19,703,469 |
|
$ |
19,638,329 |
|
$ |
19,053,214 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Equity to assets ratio |
|
20.22 |
% |
20.07 |
% |
20.11 |
% |
20.02 |
% |
20.77 |
% | |||||
|
Tangible common equity ratio (1) |
|
11.45 |
% |
11.27 |
% |
11.16 |
% |
11.02 |
% |
11.56 |
% | |||||
(1) Tangible common equity divided by tangible assets.
(2) Tangible common equity divided by shares outstanding.